Sustainable sourcing practices, Circular economy in supply chains, Supply chain risk management for sustainability, Blockchain for sustainable supply chains, Sustainable packaging solutions
“Supply chain sustainability” means to manage the environment, social and economic impacts, and to encourage practicing governance in a good manner, throughout the life cycles of goods and services. There are various reasons a company indulges itself in sustainable supply chain management journey. The previous year has been an year of escalation in awareness and low tolerance, people have become conscious of the degrading environmental conditions resulting in companies taking actions to improve social, economic and environmental impacts because society expects this and because there are business benefits to doing so In the apparel industry supply chain management is at the center as the demand is increasing constantly. The consumers want transparency and better deals, with increasing competition in the market delivering at a steady pace is strenuous. In the Rana Plaza tragedy there were casualties about 1,100 garment workers in Bangladesh on April 24, 2013 and it wounded over 2,200 and more. This very incident intrigued people to question where the clothes they wear everyday come from and who makes them under what conditions. The customers became vigilant on the environmental impacts of the apparel based industries.
India is a blessed country on the basis of resource availability, be it human resources or natural resources making it an attraction for organizations for manufacturing purposes and contributing to many national economies. Therefore, making it difficult to ignore applying sustainable ways in the apparel industry inevitable. With the growing craze of consumers to follow the latest trends , increasing their demand the apparel industries are challenged for delivering the products at a fast pace at an affordable price. India comes on the second place as it provides employment opportunities to more than 35 million people in the country. A supply chain consists of people and organizations involved directly or indirectly in satisfying a customer’s needs or request. The supply chain constitute people not only the manufacturers and suppliers but also the warehouses, transporters, retailers, buyers and consumers. As so many different people our involved sustainability maintenance is necessary. The production of textile in India impacts the environment like air, water, land etc. not only these but also the social aspects also such as child laborer and poor conditions for worker also be considered. According to ILO there are more than 250 million child workers (age from 5 to 14) in today’s world. Asia Pacific region comes first in exploiting the child laborer, then comes the following sub-Saharan Africa, Latin America and the Caribbean. Children are a cheap option for workforce in textile sector as cotton pickers, tailors, etc. As there are many scandals reported by several NGOs and due to consumer pressure, many global companies are adding social clauses into their contracts. Every phase in a supply chain is interconnected through the flow of products, information and fund. These flows are bi-directional and one of the stages or an intermediary may manage them. Here we see raw materials supplier supplies industrial product to the manufacture, manufacturer makes the product and sends to the distributor, distributor sends this product to the retailer by small scale, and finally the consumer gets the product from the retailer. These are the Supply chain stages:
- Raw material supplier
- Manufacturer
- Wholesaler/distributor
- Retailer
- Customer
Market Growth
Textile sector of India is adding to the economy of India marking back many centuries. India’s textiles industry adds up to 7 percent of the industry output (in value terms) of India in 2017-18. In the year 2017-18 the textile industry added 2 percent to the Gross Domestic Product of India. It also gave employment to about 45 million people in the same duration. In 2017-18, it also added 5 percent to the export earnings.
- As India comes in second place in largest exporters of textile in the world, in 2017, India contributed around 5 percent in the global trade of apparels and textiles.
- Overall clothing and textile export during the time period April-October 2018, was ₹1.53 trillion.
- India’s export for Ready-made garments stood at ₹61,135.34 crore (US$ 8.8 billion) in the same time period.
- The spot for largest producer of cotton in the world is also secured by India (35.1 million bales of 170 kg each)
- Exports of fiber in 2017-2018 of India were US$1,355.3 million. In the time period April-October 2018, exports for fiber were around ₹9,355.71 crore.
- In 2017-2018 the total of Fabrics, Made-Ups and Yarn exports were US$14.33 billion and in April-October 18, the exports was ₹ 63,836.9 crore (US$ 9.25 billion).
- Main business for Indian textile and apparel exports are:
- The United States
- European Union
- Parts of Asia
- Middle East
- In the recent times, it is expected that there will be a remarkable increase in India’s apparel export. By 2021 the total export is expected to reach US$82 billion with compound annual growth rate of 12.06 per cent.
Analysis of Supply Chain
Supply chain management is a vast matter consisting of numerous branches and exploit various quantitative and qualitative tools. It can be defined under 12 categories:
- Working site
- Transit and logistics
- Warehousing and estimation
- Reconstruction of channels and marketing
- Managing suppliers and emerge as a source
- Information and technical environments
- Designing of product and launching of new products
- Service and customer care services
- Reverse logistics and environmental issues
- Extrinsic contract and fraternization
- Metrics and incentives
- Global issues
With the growth in demand the apparel manufacturing companies are expected to deliver garments to the retailer and buyer on time. It is also expected that the waste produced in manufacturing is reduced and also the quantity of production is according to the demand. The few issues which can arise for the supply chain at every stage can be explained under the categories of cutting, tailoring and completing.
Scrutiny of three stages of the apparel supply chain:
1. Cutting:
- Manual laying
- Handmade pattern
- Arrangement of finished products without using visual aid
- Manual material transport
- Manual ticketing
- Surplus human resources
- Inefficient time utilization
- High cost
2. Tailoring:
- Improper storing facility
- Overtime
- Excessive manpower
- Surplus waste (fabric, spare parts etc.)
- Rebuild products
- Overproduction
- Inaccurate processing
3. Completing:
- Manual product handling approach
- Outdated machine usage
- Overkill time for work in progress
- Unavailability of finished goods
- Mediocre quality apparel
- Irregular machine maintenance
- Faulty warehousing system
Sustainable supply chain management
It is an essential part for the nourishment of a business. As the consumer is getting knowledge of economic, environmental and social impact, the companies are forced to move toward a more sustainable future. India emerged as the first country to add in its constitution about the protection and improvement of the environment. There is no specific law regarding the apparel industry but it does have definitive industrial standards to be followed. Although, government pressures are unlikely to come up with this change, but we can see pressures of corporates building on suppliers and vendors. The Indian legislation is iron clad but poorly imposed. Still the companies are trying to work in more sustainable fashion. The fact that making all the process more environmentally good and thinking about the nature earth and achieve this ecofriendly vision, the product and services a company is making in a way that does not destroy the environment, that does not exhaust the resources occurring naturally, that does not change the climate, that does not contribute to social inequalities or injustice and is done in the most principled manner.
In the recent times the companies follow an approach in that the company look at the entire manufacturing process including the place their raw material comes, so that the company can know about the disposability and recyclability of their product. This type of analysis can be called as “life cycle assessment”. This process of evaluating can be said as “one step to another”.
The companies are looking into every aspect of the way they can do the business. Sustainability not only includes the environmental aspect but also the economic aspect as well as social aspect. If the business is continuing through force by child labor at a third -world country, the business is not sustainable no matter what country the business is being operated from.
For running a business sustainably we should also consider supply chain as an aspect of it. There are many things that are considered by small or large businesses like buying raw material from one who not only think about profit but also look at the environmental aspect. The ultimate goal of every business is to create a supply chain containing the top performers with a goal of creating a more environmentally good and profitable company.
Effect on Environment
The apparel industry take in consideration a range of activities of manufacturing and considers many options in raw material and the techniques that are being used, chemical substance used and the final output. Consideration of the impact it has on the environmental aspect like water, air, land etc. must be taken. The whole supply chain management consists of many hazardous factors but the textile wet processing poses a serious threat to the environmental conditions. An enormous amount of chemicals used in wet processing to satisfy the growing customer demand. Remains tagged upon the textile are due to dyes and finishing, but a major part of these chemical substance are settled in the water that is being processed. Therefore it causes water and air pollution. During the process of drying and polymerization sequence air pollution is being caused. Unlike other industries apparel products are 100% recyclable, the recycling rates are extremely low degrading the environmental conditions further. These textile wastes unfortunately goes to landfills with 80% of them made of synthetic material.
The goal to achieve sustainability in supply chain management
- The business must be planned considering sustainability .Goals and objective of the business must be determined and ways of implementing them must be determined parallel.
- Incorporate sustainability checks in the evaluation scheme of the production. Supply chains are a part of operation, considering factors affecting the company environmentally, socially, and economically is mandatory.
- Develop policies for customers and suppliers. The policy must include some basic indicators of sustainable operations, which should comprise of its impact on the environment, disposal of waste, usage of energy, employee and social factors. A policy must be made and all the workflow must be according to it.
- Evaluate the supply chain through periodic checks using surveys or any other suitable method. Understand how the warehousing is done and what type of changes can be made to it. Buying decisions can be made considering the results of the surveys. It should be assessed thoroughly to understand where the line can be drawn. Determine whether the choice price is solely based on the sustainability level of the suppliers or some different combination.
- Backtrack to the supply chain and take appropriate action to improvise based on the evaluations. The results might come as a surprise with some changes towards sustainability itself.
There are many questions that are being frequently asked that are about related to the amount of waste produces or the energy or resource consumption. These queries are majorly based on environmental regulations. If these questions are being considered then the organization is on the right track to achieve sustainability. If not, then there are chances that the company will lose its customers as people have become more vigilant towards these issues. According to the Indian legislation it is already expected that these considerations are being satisfied and the best strategies are being followed.
The questions does not end here, there many questions related to the practices of labor , hiring of minorities, education of employees and measures taken for their security and safety are still left. The meaning of Sustainability is not only going green but also considering the social aspects. The secret of business success lies on the 3 P’s Planet, People and Profit.
There can be facilities such as an Environmental Management System that manages and reduce their environmental impacts in companies.
Advantages of a Sustainable Chain
The company might lose important customers causing loss to the business, if the changes are not made to the system. Sustainable business is a major issue and an important one for the profitability of the organization. With every year more and more companies are moving towards sustainability, the reasons might be environmental issues or public pressure, either way future is sustainability. Some advantages of a supply chain of sustainable business are given below.
- Cost savings: Cost can be saved by reducing packaging cost .The packaging takes a toll on the environment as a plastic usage is maximum for packaging purposes. If eco-friendly packaging methods can be developed, it will be sustainable as well as profitable.
- Reduced labor cost: With better working conditions motivation and productivity of labor will increase. Hence, less workforce will be required for with maximum utilization.
With safer warehousing and transportation labor cost turnover will be less.
- Competitive advantage: With taking the step towards sustainable business ethics and proactively addressing the environmental issues and social concerns, the company can have the upper hand over its competition and it can also end up influencing a government regulation. If a government policy is molded on the basis of existing supply chain management process, it will make a difficult to replicate competitive advantage for other companies and their suppliers.
- Boost up the Reputation: engaging in sustainable methods can make the company more attractive for the buyers, suppliers, potential employees and commercial partners.
